48. Realising Our Potential set out the Government's
commitment to make it easier for small and medium-sized firms
to access innovation support programmes. Such programmes include:

Small Firms Merit Award for Research and Technology
(SMART) - which aims to stimulate small businesses to develop
and market new science and technology based products, and to encourage
the formation of new businesses and encourage investment in highly
innovative technology;

49. Our evidence suggests that, as with technology
transfer, there are too many schemes and that these present a
confusing picture to users.[115]
SMEs do not have the resources to investigate what each scheme
may be able to offer them. In the longer term Government should
look to rationalise the network of innovation support schemes.
But as with technology transfer, new and existing schemes should
be given time to bed down. We recommend that the Government
publish a guide outlining the schemes available to SMEs and actively
promote these schemes, for example through the Regional Development
Agencies and trade associations.

50. Schemes such as SMART are considered important
sources of pre-product funds for start-up and small companies
and our witnesses suggest they should be extended in scale and
scope.[116]
It was also suggested that Government consider best practice from
abroad, and the US Small Business Research Innovation Program,
which provides funds to support innovative research conducted
by small businesses was cited.[117]
Excellence and Opportunity announced that the Government
would be adopting a similar scheme, the Small Business Research
Initiative.[118]
Excellence and Opportunity also introduced a new Regional
Innovation Fund, which is to support the formation of clusters
and incubators and new clubs of scientists, entrepreneurs, managers
and financiers. We welcome the Government's introduction of
measures to support innovative small businesses.

51. In our Report on Engineering and Physical Science
Based Innovation, published in February 2000, we concluded that
the UK was strong in terms of scientific production but weaker
in terms of its application and exploitation.[119]
In this inquiry, several witnesses have commented that, while
universities are becoming better at supplying technology and innovation,
the UK business base is still not taking this up.[120]
It has been shown that business expenditure on R&D as a percentage
of GDP dropped from 1.44% in 1988 to 1.19% in 1998.[121]
Mr Byers suggested that this was due to the fact that R&D
was a long term investment and many UK companies still took a
short-term approach.[122]
In the March 2001 Budget, the Government introduced a number of
measures to encourage innovation in business. These included extension
of a number of initiatives aimed specifically at SMEs (for example,
extension of both the Enterprise Management Incentives and All-Employee
Share Ownership scheme).[123]
It also announced consultation on proposals to extend the R&D
tax credits currently available to SMEs to large firms, as we
recommended in 2000.[124]
We welcome the fiscal measures introduced in the Budget to
encourage research and development and recommend that uptake be
carefully monitored. Government should also conduct a proactive
campaign to promote innovation among those parts of industry which
are not traditionally strong in R&D.

53. Realising Our Potential gave government
support and added credibility to the activities already being
undertaken to promote science to the public, and authorised real
expenditure on these activities from the science budget.[127]
Some of these activities - Science Week, for example - have had
enduring success; but overall this has been one of the least successful
aspects of the 1993 White Paper.[128]
Issues such as the BSE crisis and rapid developments in areas
such as biotechnology, which were leading to public unease, have
had far greater an impact on the public perception of science
and science advice. In our recent Report on the Scientific Advisory
System, we highlighted the loss of public confidence in scientific
advice to Government.[129]
The 2000 Report of the House of Lords Committee on Science and
Technology on Science and Society examined in depth public attitudes
to, and understanding of, science.[130]
The evidence we have received in this inquiry supports the view
that there needs to be better dialogue between scientists and
the public.[131]

54. Excellence and Opportunity acknowledges
the need for effective dialogue with the public, and outlines
a number of new initiatives. The OST, with the Wellcome Trust,
is conducting a review of scientific communication. The Government
undertakes to work with the Royal Society, Research Councils,
Science Centres and others to ensure that they operate as centres
of dialogue and debate, as well as of information. And 2001/02
has been designated "Science Year".[132]

55. Realising Our Potential did not consider
it sensible to attempt any central direction of the diverse activities
in the public understanding of science.[133]
Excellence and Opportunity has taken a similar approach,
introducing new activities but not outlining a clear strategy.
In the evidence we have received, public understanding of science
activities are criticised for being generally too small or inadequately
co-ordinated or characterised by "professional amateurism".[134]
Learned Societies felt that their activities in this area had
been overlooked and that they should be involved to a greater
extent.[135]
Responsibility for promotion of science is spread over a number
of bodies: the Royal Society, the British Association, and the
Royal Institution, for example. COPUS (the Committee on the Public
Understanding of Science) was set up to co-ordinate these activities,
but it has not been very effective to date. We welcome the steps
that are currently being taken to remodel COPUS. COPUS should
also be retitled.[136]
"The Public Understanding of Science" is an outmoded
and patronising term, suggesting ignorance on the part of the
public. The imperative is not so much to improve the public's
understanding but to ensure that science responds to what people
want, and meets public concerns. We welcome the increasing
use of the term "Science and Society" or, even better,
"Science for Society", to describe activities to promote
dialogue and mutual understanding between the scientific community
and the public.

56. Government has a clear interest in supporting
activities which promote science to the public, and a responsibility
to ensure that they are properly funded. We recommend that
the Government work with the scientific community to build a new
strategy for promoting science and technology, building upon the
work already being done butreaching out to a broader range
of participants and a wider audience.

58. The quality of science teaching in schools
has become a major concern. In recent months we have held
meetings with a number of industrial bodies. Without exception,
they have highlighted science teaching in schools as one of their
urgent concerns. Representatives of the management of Corus plc,
for example, identified the state of physics teaching in schools
in the UK, and the shortage of physics teachers, as an extremely
serious concern for their company.[139]
The Chemical Industries Association, on the other hand, placed
particular emphasis on science teaching in primary schools, on
the ground that it was at that age that children could be fired
with enthusiasm for science. There is an increasingly acute shortage
of well qualified science teachers, particularly in mathematics
and the physical sciences; and their age profile means that the
problem will become progressively worse as well qualified teachers
retire.[140]
As Excellence and Opportunity acknowledges, too many teachers
do not have degrees in the science subjects they teach.[141]
If science teachers are not properly trained in the subject they
teach, they may find it very hard to communicate a real enthusiasm
for the subject. They may also be ill-equipped to teach the practical
applications of the science which are often most attractive to
children. The problem is compounded by over-stringent application
of Health and Safety regulations, which inhibit the conduct of
practical experiments. We note that the House of Lords Committee
highlights the decline in the amount of practical work in its
recent Report on Science in Schools, and recommends that continuing
professional development for teachers should be specifically targeted
at the problem of declining practical work.[142]
We wholeheartedly endorse these views.

59. The Government has introduced a number of welcome
measures to improve science teaching in schools. £60 million
has been provided to upgrade science laboratories in schools.[143]
Some curriculum changes have been introduced, though there remains
a widespread view that the national curriculum inhibits imaginative
science teaching. Perhaps most importantly, the Government is
trying to tackle the shortage of science teachers by recently
introducing a £10,000 training and recruitment package for
teachers in specialist subjects. We note that the Education and
Employment Committee has recommended that consideration should
be given to paying higher than ordinary salaries to teachers in
shortage subjects, including science.[144]
We support this proposal, though, whatever the premia, teaching
salaries are unlikely to compete with those paid in industry.
How to attract high quality science and technology graduates
into teaching is a real problem, to which there is no ready answer.
Nevertheless, it is a matter which has to be addressed as a matter
of urgency. Given the importance to industry of ensuring good
quality S&T teaching in schools, we would argue that industry
could reasonably be expected to contribute, perhaps by allowing
day-release or sabbatical release of staff for teaching in schools,
though they would have to be appropriately trained. There is also
scope for encouraging post-doctoral research scientists into teaching.

60. Steps have been taken to improve the professional
development of science teachers, by increasing contact between
teachers and scientists in Higher Education and in industry. The
Council for Science and Technology reported on this in February
2000.[145]
The recent Report from the House of Lords Committee on Science
in Schools also focuses on the Continuing Professional Development
of teachers.[146]
There are a number of new schemes to link school pupils, too,
with scientists in industry and universities. Excellence and
Opportunity announced a new Science Ambassadors programme
to link top science students with their old schools and colleges;
and the Young Foresight programme - modelled on the work of the
Foresight Panels - is challenging young people in around 100 schools,
with the aid of mentors from business, to identify and solve problems
associated with the development of innovative new products for
the year 2020. We welcome these initiatives and commend those
companies which are contributing to them. However, schemes such
as these, valuable as they are, reach only a small minority of
children. It is essential that the Government develop a clear
strategy for improving the quality of science teaching in all
schools, providing for both teachers and students to gain experience
of science and technology in "the real world".

62. Realising Our Potential raised some concerns
about the nature of PhD training, suggesting that it did not always
match up to the needs of a career outside research in academia
or an industrial research laboratory.[150]
It endorsed the view of the Royal Society that PhD training should
be modified to include some non science-specific training, including
communication and management skills. And it called on the research
and funding councils to develop plans to change the balance of
support in favour of more Master's level training.

63. Realising Our Potential proposed the development
of a new post-graduate degree - the MRes. This degree was intended
to provide graduates with an opportunity to gain further experience
within their discipline, particularly in the laboratory, or to
broaden their knowledge base. They would also be given training
in the core skills - numeracy, literacy, communications skills
- and gain some understanding of business processes. The Research
Councils funded a number of pilot courses for a period of five
years in selected university departments. In many case these MRes
courses have been successful and the experience and qualification
valued by the students in determining the direction of their future
careers. A review of the MRes was undertaken by the Research Councils
and they have continued to provide funding for these courses.
It is as yet too early to gain any estimate of the value of this
degree to employers.

65. This is a change to the minimum student
stipend. Research Councils are free to increase the stipend if
they consider it necessary. In the current year, the MRC pays
£7,900 on average, the BBSRC £7,380 (or £15,460
for veterinary graduates) and EPSRC, ESRC, NERC, and PPARC all
pay £6,800.[153]
Medical charities generally pay significantly higher stipends
to research students. The Wellcome Trust, for example, pays its
research students approximately the equivalent to a Research Council
postdoctoral research assistant starting salary. Industry too
provides for enhanced stipends in studentship schemes they support,
such as CASE. The inconsistency in the PhD stipend paid by
different Research Councils and by independent agencies is unfair
and is likely to be distorting, given the current levels of post-doctoral
research salaries.

66. £9,000, though tax free, is still not a
very attractive salary, when compared to the initial salaries
offered to young graduates in industry, or even within the public
sector. Excellence and Opportunity stated that the Government's
aim was not to compete with starting salaries in business, but
to provide a better basis for students to pursue their studies.[154]
Lord Sainsbury told us that he "would not want to defend
this as being princely earnings for people to do this kind of
research", and that he would personally like to pay more,
but that there were other priorities for funds, notably the position
of junior researchers.[155]
Mr Byers, too, accepted that "we need to get to a situation
where we are providing adequate rewards".[156]
We welcome the very significant increase in the minimum PhD
student stipend, but we believe that it is still not enough to
ensure that the best graduates stay on to do doctoral research.
The Government should work towards a further significant increase
in the PhD student stipend.

67. While the increase to the PhD stipend is welcome,
a more serious problem lies with the pay and conditions for post-doctoral
scientists. Many of our witnesses have highlighted this problem.[157]
Pay is very low. For example, post-doctoral research staff at
Imperial College are currently paid less than office receptionists
in Central London. More damaging still is the fact that many scientists
are perpetually on short-term contracts. This insecurity is bad
for morale, and it also creates mortgage difficulties and may
affect pension entitlement. Not surprisingly, many people opt
for more secure, and better paid, jobs in industry and commerce,
or go abroad, leading to recruitment and retention problems in
the UK science base. We note that the Education and Employment
Committee has highlighted the casualisation of higher education
staff contracts in its recent Report on student retention, and
has recommended that the Higher Education Funding Council for
England should investigate the reasons why higher education institutions
are employing more part-time and fixed-term staff.[158]
We share the Committee's concern. The 1999 Bett Report (the independent
review of Higher Education pay and conditions) emphasised the
risk of significant recruitment and retention problems in the
"not too distant future" and called for extra investment
by Government to fund pay increases.[159]
Excellence and Opportunity acknowledged
that the career development prospects for young researchers were
a cause for concern; and stated that the Government was encouraging
the universities and the Funding and Research Councils to promote
good practice in career development.[160]
This is welcome, but not enough. The Government can no longer
afford to ignore the problem of low pay and poor job security
for post-doctoral researchers and support staff. A shortage of
skilled personnel threatens to undermine its commitment to strengthening
the science base.

68. We are also concerned that scientists who do
succeed in securing a permanent position, perhaps as a lecturer,
are often diverted away from research into broader teaching and
administrative duties. We do not wish to divorce research from
teaching. The very best scientists can often be brilliant at both
teaching and research. But others, though excellent in research,
are poor in communicating their learning to students; and some
are inspired teachers while unproductive in research. What
is important is to build on the strengths of the individual and
to accord equal value, and rewards, to both teaching and research.

69. We are aware that the Royal Society supports
some research professorships, which have no teaching commitments.
There may be a case too for creating career research posts for
younger scientists and engineers who demonstrate particular promise
in research. We are encouraged by Mr Byers's willingness to consider
the possibility of funding such posts.[161]
We must identify promising researchers and fund them properly.
Funding should not be limited to projects, but should be available
for speculative, pre-project, exploratory research. Fellowships
should be available to support, and encourage, excellent researchers
through the difficult early years of their careers. We note that
Sir Gareth Roberts, President of Wolfson College Oxford, has been
asked to conduct an independent review of the supply of skilled
scientists and engineers in the UK, reporting by February 2002.[162]
We welcome this review, and hope that it will address the need
to provide a proper career path for young scientists and engineers.
We must do more to support excellent scientists and engineers.

70. Excellence and Opportunity states the Government's
commitment to encouraging more scientists and engineers to come
to the UK, to study and then to stay on to work.[163]
We welcome the measures taken to remove barriers imposed by immigration
and work permit rules. We also need to attract people who have
gone to work abroad back to the UK. We welcome the scheme, announced
in the recent Enterprise, Skills and Innovation White Paper, to
attract experienced British entrepreneurs back from abroad.[164]
The need to attract skilled managers into the country has been
highlighted in recent meetings we have held with industrialists,
for example by the BioIndustry Association. The Government
must ensure that schemes to encourage experienced entrepreneurs
from abroad to come to the UK are not undermined by tax disincentives.